White-Collar Crime

Despite money-laundering case, Bitcoin evangelist sees bright future for virtual currency

The arrest late last month of 24-year-old Charles Shrem in a federal money-laundering case wasn’t good news for the developing Bitcoin industry.

But the founder of BitInstant, an exchange site for the virtual currency, said from his lawyer’s office that he still sees a bright future for Bitcoin, reports the Wall Street Journal (sub. req.). This year “will be like the Industrial Revolution for bitcoin,” predicted Shrem, who is on house arrest but is allowed to travel to his lawyer’s office, where he spoke with the newspaper.

He and his defense counsel, Marc Agnifilo of Brafman & Associates, declined to comment on the criminal charges against him.

Shrem has pleaded not guilty in the Manhattan federal court case, in which he and another man are accused of facilitating $1 million in drug sales on the now-shuttered Silk Road website. (A CNET article and an FBI press release provides more details about the charges.)

The Bitcoin concept allows individuals to purchase, more or less anonymously, virtual currency on Internet exchanges that can then be used to buy goods and services from those who accept payment in bitcoins. Although acceptance is far from universal, a number of mainstream businesses including some law firms now do so. Because the virtual currency is bought and sold, the value of purchased bitcoins fluctuates.

Related coverage:

ABAJournal.com: “Feds arrest 8 more in Silk Road case, say others in claimed $1.2B scheme should be ‘very nervous’”

Bloomberg: “Winklevoss lawyer in talks with SEC over Bitcoin ETF”

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